April 14, 2010
NEW JERSEY LAWYERS' FUND FOR CLIENT PROTECTION, PLAINTIFF-RESPONDENT,
OLIVIA HOWARD, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-3219-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued March 22, 2010
Before Judges Chambers and Yannotti.
Defendant Olivia Howard appeals from an order dated February 2, 2009, which enforced a settlement of this matter, entered judgment in favor of plaintiff, New Jersey Lawyers' Fund for Client Protection (Fund), in the amount of $175,000, and required defendant to pay $25 per month towards satisfaction of the judgment. We reverse.
Defendant was admitted to the Bar of the State of New Jersey in 1981. The Fund asserts that, in May 1995, Oakbridge Investments, Ltd. (Oakbridge) wired $200,000 to defendant's trust account at National Westminster Bank. According to the Fund, those monies were to remain in her trust account until Oakbridge instructed defendant concerning the disposition of the monies. Oakbridge filed an ethics complaint against defendant, alleging that she made disbursements of the funds without its authorization.
The Office of Attorney Ethics investigated the complaint, and found that defendant had improperly disbursed Oakbridge's monies to herself, a person named Amin Rashid (Rashid) and certain entities. Defendant was disbarred by consent on March 28, 2000. In re Howard, 163 N.J. 92 (2000). The Fund maintains that defendant consented to her disbarrment as a result of the Oakbridge matter.
Oakbridge filed a claim with the Fund seeking reimbursement of the monies that defendant wrongfully disbursed from her trust account. The Fund investigated the matter and determined that defendant had misappropriated, embezzled or stolen $200,000 of Oakbridge's monies. The Fund awarded Oakbridge $200,000 and on December 6, 2005, filed this action against defendant seeking reimbursement of the $200,000 it had paid to Oakbridge. Defendant filed an answer denying liability. She asserted, among other things, that Oakbridge was never her client and the Fund improperly awarded the monies to Oakbridge.
On November 14, 2008, the Fund filed a motion in the trial court to enforce a settlement allegedly reached in this matter. In support of that motion, the Fund's attorney, Edward T. Ehler (Ehler), filed a certification in which he stated that the matter had been scheduled for trial on October 27, 2008. After some discussion with the attorneys, the court directed the parties to return on October 29, 2008.
According to Ehler, over the next several days, he and defendant's attorney, Alan Dexter Bowman (Bowman), engaged in extensive negotiations and the parties reached a settlement, subject to approval by the Fund's Trustees at a meeting scheduled for November 19, 2008. Ehler said that the parties agreed to the entry of a consent order and judgment in favor of the Fund in the amount of $175,000, with an agreement by defendant to pay that amount in $25 monthly installments.
Ehler asserted that the Fund's agreement to the monthly payment plan was based on information that had been provided concerning defendant's financial circumstances, which defendant was to confirm by completing an information subpoena. According to Ehler, the parties agreed that the terms of the payment plan would be set forth in a letter rather than a consent order and judgment, and defendant wanted to review the language that would be included in the letter.
Defendant also wanted to review the consent order and judgment and the information subpoena. Accordingly, Ehler faxed a letter to Bowman on October 28, 2008, with the language concerning the payment plan. Ehler stated that Bowman told him that defendant had reviewed and approved the language, consent order and the judgment and information subpoena.
Ehler faxed another letter to Bowman on October 29, 2008, which confirmed that the case had been settled, subject only to approval by the Fund's Trustees. Enclosed with the letter were copies of the consent order and judgment and the information subpoena. Ehler asked Bowman to have defendant complete the information subpoena and return it to him by November 7, 2008. He also asked that the consent order and judgment be executed and returned by November 17, 2008.
By letter dated October 30, 2008, Ehler advised the court that the case was settled. In his letter, Ehler set forth the terms of the settlement, noting that it was subject to the approval by the Fund's Trustees at their November 19, 2008, meeting. Ehler asked the court to adjourn the November 17, 2008, trial date so that the Fund could approve the settlement. In a letter to the court dated October 31, 2008, Bowman confirmed Ehler's representations "relative to the terms of a settlement." The court thereupon adjourned the trial date to December 1, 2008.
Defendant did not, however, provide Ehler with the completed information subpoena by November 7, 2008. Ehler called Bowman to remind him that he wanted to incorporate the information subpoena into the Fund's agenda for the November 19, 2008, meeting. Bowman told Ehler he would contact defendant concerning the information subpoena. On November 10, 2008, Bowman called Ehler. According to Ehler, Bowman told him "that his client had changed her mind and did not want to proceed with the settlement."
Defendant opposed the Fund's motion and submitted a certification from Bowman, in which he stated that on October 28 and 29, 2008, he discussed the matter with Ehler and defendant. Bowman said that it was his recollection that a settlement was not reached on October 28, 2008, and discussions had continued on the following day. Bowman stated that he recalled that he communicated "final assent" to Ehler on October 30, 2008. He stated that this "communication was apparently the product of [his] understanding of conversations with defendant." Bowman acknowledged that he sent "confirming documents" to Ehler but did not provide copies to defendant.
Bowman additionally stated that, after Ehler contacted him concerning the information subpoena, he spoke with defendant who told him "that she did not desire a settlement and had not authorized [him] to communicate" that a settlement had been reached. According to Bowman, he informed defendant that he would not have informed Ehler that the case was settled "absent an understanding that she agreed." He "indicated that [his] best characterization [would be] that there must have been a miscommunication or misunderstanding." Bowman told Ehler "that defendant did not desire to settle."
In his certification, Bowman also said that defendant was "adamant" that she had not "change[d]" her mind. Bowman asserted that he did not tell Ehler that defendant had "changed her mind" regarding the settlement. Bowman said that his "best recollection" was that he told Ehler that defendant believed that he had "misunderstood her" and "at no time" did she consent to the settlement.
Defendant also submitted a certification to the trial court. Defendant said that she had surrendered her license to practice law for reasons that had nothing to do with the Oakbridge matter. Defendant denied that she misappropriated Oakbridge's monies. She said that on October 28, 2008, she spoke several times with Bowman about this case. According to defendant, she told Bowman that she had not done anything dishonest and she was a "victim of a ruse[.]" She told Bowman that she wanted "to exercise [her] right to a trial to clear [her] name and live the rest of [her] life in peace."
Defendant also stated that, after further discussion, Bowman told her that the Fund had offered to reduce its demand from $200,000 to $175,000, and she would only be required to pay $25 per month, except if her financial circumstances changed. Bowman provided defendant with a information subpoena. Bowman later called defendant, and she told him that the Fund's offer to settle for $175,000 was no different from the offer to settle for $200,000. Defendant told Bowman she had not seen a copy of the agreement and she could not intelligently discuss anything with him without it. She additionally told Bowman "unequivocally" that she would only seriously consider a settlement in the amount of the counsel fees she had received.
Bowman thereafter forwarded defendant a copy of the proposed consent order and judgment. It did not provide for payment of $20,000, which defendant said was the amount she told Bowman she would consider paying to settle the case. According to defendant, Bowman stated that she should review the papers and get back to him by November 7, 2008, if she was interested in settling. Defendant told Bowman that she would not sign the papers she had been provided.
She stated that she "want[ed] to believe that Alan Bowman misunderstood [her] when [she] told him unequivocally and only that [she] would take a look at the papers that he wanted [her] to review but that [she] was not interested in a settlement for more than the counsel fees which [she] received." Defendant asserted that she told Bowman "that he had no business telling anyone that [she] agreed to settle because [she] only agreed to look at the papers that he kept asking [her] to review[.]"
The trial court considered the Fund's motion on January 23, 2009, and placed its decision on the record. The court found that there was no confusion in Bowman's mind when he told Ehler and the court that defendant had agreed to settle the case. Rather, there was "a change of circumstance" by defendant and she communicated that to Bowman "after the deal was struck." The court stated that the attorneys had advised the court of the terms of the settlement by October 31, 2008, and the first indication that the matter had not been settled was on November 10, 2008. The court found that defendant had "a change of heart[.]" The court rejected the assertion that there had been a miscommunication because it was "a simple enough settlement." The court found that the parties had reached a binding settlement of the matter and it would be enforced. This appeal followed.
Defendant argues that the trial court erred by finding that she had agreed to settle this case and thereafter changed her mind. Defendant contends that the record established that, although Bowman told Ehler that she had agreed to the settlement, he was mistaken and misinterpreted what she said to him. Defendant therefore maintains that the order enforcing the settlement should be reversed and the matter remanded for trial or, alternatively, the case should be returned to the trial court for an evidentiary hearing on whether the settlement should be enforced.
"'The settlement of litigation ranks high in our public policy.'" Jennings v. Reed, 381 N.J. Super. 217, 226 (App. Div. 2005) (quoting Jannarone v. W.T. Co., 65 N.J. Super. 472, 476 (App. Div.), certif. denied, 35 N.J. 61 (1961)). This policy is based on the understanding that the parties to a lawsuit are best able to determine the manner in which the dispute should be resolved. Ibid. (quoting Peskin v. Peskin, 271 N.J. Super. 261, 275 (App. Div.), certif. denied, 137 N.J. 165 (1994)). Accordingly, "courts 'strain to give effect to the terms of a settlement wherever possible.'" Id. at 227 (quoting Dep't of Pub. Advocate v. N.J. Bd. of Pub. Util., 206 N.J. Super. 523, 528 (App. Div. 1985)).
As we stated previously, in its decision, the trial court essentially found that, when Bowman told Ehler that defendant had agreed to the settlement, he did so with defendant's authorization. The court further found that defendant thereafter changed her mind but she remained bound by the settlement to which she had previously given her consent. In our view, the record does not support the trial court's findings or conclusions.
"It is well settled that 'stipulations... made by attorneys when acting within the scope of their authority are enforceable against their clients.'" Id. at 230 (quoting Carlsen v. Carlsen, 49 N.J. Super. 130, 137 (App. Div. 1958)). We presume that an attorney of record is authorized to act on behalf of his or her client, and the party who asserts that an attorney lacks such authority has "'a heavy burden to establish that [her] attorney acted without any kind of authority'" in agreeing to a settlement. Id. at 231 (quoting Sur. Ins. Co. of Cal. v. Williams, 729 F.2d 581, 583 (8th Cir. 1984) (alteration in original)).
We are convinced that defendant carried her burden of showing that she did not authorize Bowman to settle the case. In her certification, defendant stated without qualification that she did not agree to the settlement, as proposed by the Fund. She stated that she informed Bowman that she wanted to review the settlement documents but never said that she would settle the case by paying the Fund $175,000. Defendant also stated that, if Bowman told Ehler and the court that she had agreed to the settlement, he did so without her authorization.
We recognize that Bowman told Ehler and the court that defendant had agreed to the settlement. Bowman stated, however, that he apparently misunderstood what defendant said regarding the settlement. In addition, defendant stated without qualification that Bowman misinterpreted what she said to him regarding the settlement.
In our judgment, there is insufficient evidence in the record to rebut Bowman's assertion that he misunderstood defendant's views on the settlement and defendant's unqualified statement that she never authorized Bowman to settle the case. We therefore conclude that, in light of this record, the court erred in enforcing the settlement.
Accordingly, the order of February 2, 2009, enforcing the settlement is reversed and the matter is remanded to the Law Division for trial.
© 1992-2010 VersusLaw Inc.